KEEPING THE PRESSURE ON: More needs to be done to clean up the business environment, says Ivars Slokenbergs.
RIGA - Investors in Latvia are concerned about corruption and insufficient transparency in the business environment in Latvia, claims American Chamber of Commerce in Latvia (ACCL) President Ivars Slokenbergs in an interview with the business portal Nozare.lv.
“The government is emphasizing all the time that producers and exporters have to be supported. However, the government must do much more for the development of the business and investment environment. There has to be stable legislation, and any businessman has to feel safe that the legislation and the requirements of the state are predictable and transparent. This concerns not just the tax policy but also licenses, territorial planning and other factors,” said Slokenbergs.
Although energy is a very important aspect in any business, the rules on renewable energy resources have changed several times over the past few years, said Slokenbergs. Many businessmen are concerned about making investments in, for instance, a wind park, given that laws are changing all the time, and there is little transparency in the quota distribution system. The tax policy on energy also leaves many questions unanswered.
“We have sent a letter to Prime Minister Valdis Dombrovskis [New Era] with a question regarding Latvia’s competitiveness after the excise tax on natural gas is raised on July 1, and there are several ACCL members, for instance, Sakret and Cemex, that use natural gas in production of construction materials. It is estimated that natural gas will become 6 - 8 percent more expensive. Sakret also has plants in Estonia and Lithuania, and it is possible that it might be more reasonable for the company to shut down its plant in Latvia and continue production in Estonia or Lithuania, and import the materials into Latvia,” said Slokenbergs.
The intrigues and speculation regarding the stability of the lats last year also were rather worrisome. “Regardless of how orderly the investment environment, an investor who flies to Latvia and reads yet another article in The Financial Times about a possible devaluation of the lats will not be very optimistic about investing in Latvia,” he added.
“We hope that the situation is improving, Standard&Poor’s recently raised Latvia’s credit rating. Despite the challenges posed by the crisis and the budget cuts demanded by the international lenders, stability is gradually returning to Latvia and Europe, and some interest from U.S. investors can also be observed,” commented Slokenbergs.